Reko-Diq Project: Pakistan hopeful of reaching deal with Saudi Arabia by December, says Kakar

Pakistan’s caretaker Prime Minister Anwaar-ul-Haq Kakar has said the government is hopeful of inking a deal by December for Saudi Arabia to buy any potential stake in the Reko Diq project.

The project, one of the world’s biggest gold and copper mining projects located in Balochistan province, has attracted attention from the Gulf state at a time when Pakistan is desperately seeking non-debt creating foreign exchange inflow.

“Well we are quite excited at the Saudi offer,” said Kakar during an interview with Arab News aired on Tuesday night. “We would be very much encouraging their participation, not just in this project, but otherwise also,” the interim PM added while responding to a query on whether the Pakistan government was okay in selling its equity to Saudi Arabia and dilute its stake in the project.

At present, 50% of Reko Diq is owned by Barrick Gold Corp, 25% by three federal state-owned enterprises (OGDCL, PL, and GHPL), 15% by the Province of Balochistan on a fully funded basis and 10% by the Province of Balochistan on a free carried basis. This essentially splits the project into two entities – Pakistan and Barrick Gold – at the moment.

The caretaker prime minister avoided commenting on sharing details of the commercial deal.

“As far as the contractual details are concerned, I would avoid commenting on such a commercial deal. It is the negotiating part, which is happening between three parties. Let’s see what sort of outcome comes of that.”

The caretaker PM said that his government would encourage Saudi Arabia to be part of the Reko Diq deal.

Last month, sources told Business Recorder that the Energy Division along with Board of Investment (BoI) has been drafting terms and conditions to hire a financial advisor (FA) to carry out a third-party assessment of the value of the federal government’s 25% shares in Reko Diq gold and copper mines for possible sale to Saudi Arabia’s Public Investment Fund (PIF).

Antofagasta of Chile exited the project after selling its stake in exchange for $900 million to three companies.

On August 7, 2023, Barrick CEO Mark Bristow acknowledged a strong relationship between Saudi Arabia and Pakistan but added that as Barrick has the controlling shares they have the right of first refusal. Bristow; however, stated that Barrick will support Saudi Arabia’s PIF purchase of 25% equity stake of the federal government.

In August, 2023, Special Investment Facilitation Council (SIFC) urged federal government entities, Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL), to conclude the transaction with Saudi companies by March 2024, sources said.